Real Estate

House prices: The real sign a bubble is approaching

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When those reliant on house sales for their income start asking for there to be a lid on price rises, it's time to start wondering whether a bubble is on its way.

So the plea on Friday from the Royal Institute of Chartered Surveyors (Rics), an influential U.K. group of surveyors and estate agents, for the Bank of England to take action to cap future house price rises at 5 percent may be seen as a key turning point in the housing market cycle. House prices are now rising at their fastest rate in the U.K. since 2006, according to figures released by the group earlier this week.

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The organization is concerned that large hikes in prices could put off buyers – of course, estate agents profit from the volume of house price sales as well as the price they fetch.

And there are now more estate agents in the U.K. than at any time since records began, with another 77,000 people joining the industry last year, according to U.K. government statistics.

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Joshua Miller, senior economist at Rics, said: "The Bank of England now has the ability to take the froth out of future housing market booms, without having to resort to interest rate increases. Capping price growth at, say, 5 percent is one way of doing this."

This development could mark the end of the honeymoon for new Bank of England Governor Mark Carney, hired earlier this year from Canada's central bank. His introduction of forward guidance and declaration that he won't move interest rates until unemployment hits 7 percent (it is currently at 7.7 percent) has yet to be tested in the long term.

By CNBC's Catherine Boyle. Follow her on Twitter: @cboylecnbc

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